Bank hits at tax structure

Press, 31 March 1981, Page 22

Bank hits at tax structure

The annual report of the National Bank of New Zealand. Ltd, for the year ended October 31 discloses a consolidated profit after tax of $15,549,000 compared with $12,017,000 for the previous year. However, the profit benefited from an extraordi nary item of $951,000. This year, for the first time, the bank includes supplementary accounts expressed in current values. These are designed to show the effects of inflation and the profit on an historical cost basis is reduced to $4,832,000 as a result of current cost accounting adjustments. In his review the chairman (Sir John Marshall) says that in view of uncertain world economic conditions the bank has considered it appropriate to make a .larger than usual

provision for bad and doubtful debts. “A number of problems still beset New Zealand, for which there are no easy or short term answers,"' Sir John says. "To achieve the contemplated developments in the energy field will require huge investment. If at the same time we increase, as we must, our investment in other promising areas to further improve our overseas earnings, the total funds required become formidable indeed. “The bulk of this finance mqst come from overseas and although New Zealand is considered to be an attractive country in which to invest, lenders will want to be assured that specific projects are soundly based and capable of sustaining the investment involved.” Sir John adds that, in addition to the decisions already taken, further policy changes are needed to create the economic, social and industrial climate in which

private enterprise has'' the incentives and the opportunities to meet the challenges of this new decade.

“The present taxation structure, distorted by 10 years of high inflation, provides little incentive for the kind of effort that will be necessary for our development plans to succeed. > In addition, he says, the number of skilled tradesmen and technicians must be increased substantially by the provision of appropriate incentives, and New Zealand must achieve greater industrial co-operation so- that greater productivity can support greater rewards. “The broad plan on which the country is embarking is bold but undoubtedly in the right direction. We are aiming to change the traditional economic structure of a country with a population of only three million, geographically isolated, still substantially dependent on agricultural exports, but with a growing industrial strength,” he says.